The Income Tax Appellate Tribunal, Mumbai bench declared that amenities received along with rental income under the lease agreement is assessable as House Property Income under the provisions of the Income Tax Act, 1961 if the same is part and parcel of the same transaction.
The bench comprising of judicial member Shri.D.T Garasia and Accountant member Shri.Manoj Kumar Aggarwal held so while disposing the appeal filed by assessee.
In the instant case, assessee is a resident individual let out his properties and received a rental income Rs.24, 00,000/- comprising of rent income and amenities charges. However upon perusal of agreement, the AO found that assessee was entitled for an enhanced rental income and enhanced amenities charges as per the contractual terms. Further opinioned that amenities charges received must be treated as income from other sources instead of income from house property so they won’t avail the statutory deduction of 30%.
Aggrieved the assessee contested the same before CIT through an impugned order contented that he never increased the rent amount and the same was being derived under income from house property. The CIT was not convinced by the assessee contention, while upholding the both enhanced income and enhanced amenities comes under income from other sources against which the assessee was entitled to claim security charges of Rs.1.20 Lacs provided the nexus thereof with amenity charges could be established by the assessee before Ld. AO. Aggrieved, the assessee is in further appeal before the tribunal.
The bench heard both rival contention and opinioned that on perusal of the contractual agreement reveals that the assessee was entitled for certain increases in the charges every year. At the same time, it is also noted that the receipts of the assessee were subjected to Tax Deduction at Source, the details of which are reflected in Form 26AS.As per clause-3 the assessee was required to give maintenance service to its user and clause (4) c the assessee could terminate the agreement in the event of non-payment of amenity fees for two consecutive months and in that event, lease and license agreement was also liable and considered to be terminated. Upon perusal of these clauses, bench found that the two agreements were linked together and part and parcel of the same transactions.
Therefore court observed that amenities charges being part and parcel of same transaction were assessable as Income from House Property against which the assessee was entitled for statutory deduction of 30%.
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